Many tire OEMs have increased prices in CY-2021, ranging from 3-10% depending on type of tire and size. Higher commodity prices and increased ocean freight rates are being passed on to end users as OE profit margins compress.
Most of the subject matter experts that we spoke to expect an increase in tire prices, although predicting future tire costs is difficult due to variables that influence tire pricing.
Retread tires offer comparable performance to a new tire in a more environmentally friendly package. Here’s how to make sure they last.
Upward cost pressures on replacement tires have emerged in 2018, due to higher cost for the commodities used to manufacture tires and the trend to larger diameter 17- to 18-inch wheels, which are more expensive to replace.
Michelin North America Inc. will increase prices on its commercial tires on Dec. 1 by as much as 8%.
Higher commodity prices are putting upward pressure on fleet prices for replacement tires. National accounts are no longer as willing to absorb the majority of price increases, which are between 3%-8% on select tire lines.
A fleet cost reduction program goes straight to the corporate bottom line. If a company operates at a 10% annual net profit margin, reducing annual fleet expenses by $100,000 is the equivalent of generating $1 million in sales. Although fleet managers manage hundreds of thousands to tens of millions of dollars in corporate assets, only half are incentivized to achieve targeted performance goals. I advocate incentivization should be a universal best practice extended to all fleet managers.
For the past four years, tire costs have been stable. But, new cost pressures have emerged in 2017, due to higher prices for the commodities used to manufacture tires and the trend to larger diameter, more expensive tires.
A tire veteran provides tips to keep in mind when shopping for a tire that would best fit your fleet's needs. It's not always about price; it's also about efficiency and mileage.
As a wear item, tires are a depreciating asset. Your job, as the fleet manager, is to slow the rate of depreciation. Replacement tires as a cost category are a fleet’s second-largest operating expense, exceeded only by fuel. By maximizing tire tread life, you lower per-mile costs, resulting in fewer premature removals and optimizing the condition of tire casings, allowing for multiple retreads.
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